Since Thursday’s must
hearAudioblog, the global economic situation has weakened
dramatically – as the equity market’s worst-ever start to a New Year;
following its worst-ever year-end; has been matched only by the horrifying
collapses of commodities; high yield bonds; and last but not least,
currencies – as China’s loss of control of not only its stock market, but
“offshore Yuan” trading, has – per the title of Thursday’s article, “set the
stage for a global currency catastrophe.” To that end, I have gathered
six pages of “horrible headlines” in the past 48 hours alone – which I’ll
simply list here, in the interest of brevity. Followed by today’s
principal topic, as “teased” by today’s article title.
However, before I get to these issues, I must comment on an ominous
article regarding what Donald Trump, the frontrunner for the U.S.
Presidency, just proposed. Unless you’re living on an island, you’re
well-aware of the dangerous, antagonistic policies Trump has been championing
– which sadly, become more viable with each passing day. However,
yesterday’s proposal to impose a 45% import tariff on all Chinese goods defines
biting your nose off to spite your face. If such a psychotic,
suicidal act were undertaken, the global currency wars would erupt into a
nuclear conflagration – starting with the dollar, when the price of
essentially everything Americans buy rise by 45% – at least.
Wal-Mart, by farAmerica’s largest private employer, would be thrust to the
brink of bankruptcy; government entitlement payments (and income taxes) would
go parabolic; and the national debt would rise hyper-bolically.
Yes, my friends, this is a “taste” of what life might be like in the coming
years, as the collateral damage of the collapse of history’s largest fiat
Ponzi scheme unfolds. Which, I might add, is why the urgency of
protecting your life’s savings has never been stronger.
I’ll get to the “atoll in a tsunami” momentarily; but before I do, here’s
a sampling of what’s been “going on” in the past 48 hours…
- Oil down 10% after five-day drop; Goldman says $20/bbl
likely
- Junk-bond risk gauge jumps as China meltdown adds to
energy rout
- Glencore stock plunges to all-time low
- Brazil slides into the brink – Industrial Production
down 12% year-over-year
- Commodities rout forces resource firms to slash capex,
dividends
- China burned through $120 billion in FX reserves in
December – Devaluation crisis straight ahead
- U.S. auto sales are about to choke, as increase in
non-revolving credit smallest in four years
- Baltic Dry Index careens to fresh all-time low
- UK poll shows BrExit support rising
- Canadian heavy crude falls to $19/bbl – from $100/bbl in
2011
- OPEC basket crude price crashes below $30/bbl, to lowest
level since 2004
- Saudi devaluation odds highest in 20 years – now more
likely to default than Portugal
- “Death
to Saudi Arabia”: Thousands of Iranians in anti-Saudi protests
- Dear Janet, this was not supposed to happen – yield
curve flattest since 2008
- The hedge fund known as the Swiss National Bank posts $23
billion trading loss
- Atlanta Fed cuts 4Q GDP growth estimate to 0.8%
- The last time automakers channel-stuffed this much,
Lehman and GM went bankrupt
- Wholesale trade data suggests manufacturing recession
spreading to entire economy
- Markets spooked after PBOC announces more “interest rate
liberalization”
- Macy’s prepares to sell crown jewels, fire 3,000
- Copper futures crash below $2.00/lb for first time since
2009
- Bill Gross warns of demographic doomsday (in this must
readarticle)
- China suspends circuit-breaker rules, after two
limit-down plunges in four days
And my personal favorite – from one of Wall Street’s most clueless, but
well-followed “strategists”…
- Blackstone’s Byron Wein giving up on gold
Which brings me to today’s principal topic, of the “atoll in a
tsunami” the credibility of U.S. “employment” data has become. Yes,
amidst the historic economic and financial market carnage, it happened to be
a “jobs report” week – starting with Wednesday’s “much better than expected”
ADP report, and concluding with yesterday’s unconscionably ridiculous
+292,000 NFP job print. Which clearly didn’t have the data
manipulators’ intended effect – as stocks, Treasury yields, junk bonds,
commodities, and currencies plunged; whilst gold surged, and silver was
unchanged.
Never mind the typically ugly “details” – such as an essentially unchanged
labor participation rate (at 38-year lows); falling hourly wages; and
a hideous job mix, featuring low-paying, non-productive “education and
healthcare” workers; waiters and bartenders; and temporary help. And oh
yeah, the biggest surge in “multiple job holders” since…drum roll
please…August 2008. In other words, if a $100,000/year engineer loses
has job, and takes four five-hour-per-week fast food jobs totaling
$20,000/year, the BLS now calculates that the economy has “added three
jobs!” And speaking of layoffs, just wait until the dozens of
gargantuan acquisitions fueled by cheap Fed money, “liberal” GAAP accounting,
and “black magic” Wall Street financial engineering close in the coming
months. Let alone, the corporate and governmental reactions to the
fourth quarter’s unprecedented commodity and currency collapse; the worst
retail holiday spending since the 2008 crisis; and the now undeniable
bursting of the historic subprime auto lending bubble.
But I digress, as the key message here is that, as I predicted two years
ago, the end of the influence of “island of lies” economic reports like NFP
employment is rapidly approaching – to the point that inevitably (and
perhaps, after yesterday’s historic fabrication, imminently),
investors will no longer pay attention to what was once the “most important
economic report in the world.”
Heck, the Federal Reserve did so itself – despite continuing to cite
“improving labor markets” as the key driver of economic “recovery” – when
nearly two years ago, it abandoned its previously-stated condition of raising
rates when the “unemployment rate” fell to 6.5%, calling it an “outdated”
economic metric. I mean, Janet Yellen herself has publicly stated that
she is more focused on labor participation, real wages, and full-time job
creation. And yet, has the gall to “raise rates” based on “improving
labor markets” when all three of these metrics have not only worsened in the
past two years, but dramatically so. To wit, a 38-year low Labor
Participation rate; a four decade low in real median household income; the
lowest percentage of full-time versus part-time jobs ever; the lowest
percentage of benefits-paying jobs ever; and the weakest job mix – perhaps
since the 1800s – due to the serial, irreversible destruction of the nation’s
manufacturing base. Which, I might add, may well return in true Atlas
Shrugged form if Donald Trump’s 45% Chinese import tariff proposal is
enacted. And if you don’t know how Atlas Shrugged ended, I
suggest you read it immediately.
In a nutshell, the “island of lies” I referred to the NFP report as in
July 2014 has, in just seventeen months, been “eroded” by data-cooking so
egregious, even the Chinese government was likely blushing yesterday.
In other words, the last bastion of U.S. economic propaganda is crashing to
the ground, as vulnerable as an “atoll in a tsunami” – which, in my view, may
well have washed over it yesterday. Yes, the “powers that be” will
continue to fight reality to the death, by increasing their money
printing, market manipulation, and propaganda exponentially. However,
you know the “end game” is upon our doorsteps when, amidst the worst
financial market carnage of our lifetimes, this is the headline Yahoo!
Finance trots out…
- “The stock selloff is happening in a parallel universe”
– It has almost nothing to do with the U.S. economy, which is doing
pretty well
Well, that’s enough for now. It’s early Saturday morning; and after
a tumultuous week, I need some rest. But before I go, I must, yet
again, warn you that what is occurring – worldwide – is unprecedented,
and more terrifying than anything I have ever witnessed. Which is why,
as vehemently as possible, I am warning you that the time is NOW to protect
yourself – financially and otherwise. And if, by chance, such
protection involves the purchase or storage of Precious Metals, I humbly ask you
to give Miles Franklin, now in its 27th year of business, a call
at 800-822-8080, and give us a chance to earn your business.